Acct 2020 Chapter 11

A(n) ________ is a carefully predetermined cost that is usually expressed on a per unit basis. A) allocated cost B) applied cost C) standard cost D) flexible cost

The type of standard that provides allowances for normal amounts of waste and inefficiency in the production process is referred to as a(n) A) ideal standard. B) perfection standard. C) realistic standard. D) practical standard.

As managers use less and different types of direct materials, which of the following standards do managers focus on to enhance sustainability in the workplace? A) Quantity/Efficiency standard B) Price standard C) Flexible standard D) Both A and B

If the purchasing manager purchased a greater quantity of raw materials than budgeted, but paid the Standard Price (SP), which variance may be affected? A) Materials price variance B) Materials quantity variance C) Both of the variances may be affected D) Neither of the variances may be affected

Which variance is directly impacted if a worker drops the raw material during production and the raw material must be discarded? A) Direct materials quantity variance B) Direct materials price variance C) Direct labor rate variance D) Direct labor efficiency variance

A company uses sugar in producing its product. If the price of sugar doubles, which variance is directly impacted? A) Direct materials quantity variance B) Direct materials price variance C) Direct labor rate variance D) Direct labor efficiency variance

A company's purchasing department negotiates all of the purchasing contracts for raw materials. Which variance is most useful in assessing the performance of the purchasing department? A) Direct materials quantity variance B) Direct materials price variance C) Direct labor rate variance D) Direct labor efficiency variance

Which of the following situations may lead to a favorable direct materials price variance? A) The purchasing manager was able to negotiate a lower purchase price for raw materials. B) A vendor shipped a greater quantity of raw materials than ordered. C) The purchasing manager paid a premium price for a higher quality of raw materials. D) Raw materials waste was substantially reduced in the factory.

The direct materials price variance is calculated as A) the difference in Actual Quantities (AQ) multiplied by the Actual Price (AP) of the input. B) the Actual Quantity (AQP) of direct materials divided by the Actual Quantity (AQ). C) the difference in prices of the Actual Quantity Purchased (AQP) and the Actual Price (AP) multiplied by the Actual Quantity Purchased (AQP) and the Standard Price (SP) of the input purchased. D) the direct materials Actual Quantity Purchased (AQ) divided by the per unit price.

The Standard Quantity (SQ) of direct materials is calculated as A) the budgeted quantity of units less the Standard Quantity (SQ) of units. B) the Standard Quantity (SQ) of input per unit times the number of units budgeted. C) the number of units actually made times the direct materials price standard. D) the Standard Quantity (SQ) of input per unit times the number of units actually made.

33) A favorable direct materials quantity variance indicates which of the following? A) The actual cost of direct materials was less than the standard cost of direct materials. B) The Standard Quantity (SQ) of direct materials for actual output was less than the Actual Quantity (AQ) of direct materials used. C) The Actual Quantity (AQ) of direct materials used was less than the standard quantity for actual output. D) The Actual Quantity (AQ) of direct materials used was greater than the standard quantity for budgeted output.

A favorable direct materials price variance indicates which of the following? A) The actual cost of materials purchased was greater than the standard cost of materials purchased. B) The standard cost of materials purchased was less than the actual cost of materials purchased. C) The Actual Quantity (AQ) of materials used was less than the standard quantity of materials used for actual production. D) The standard cost of materials purchased was greater than the actual cost of materials purchased

The direct materials flexible budget variance can be divided into which of the following two variances? A) Price variance and the rate variance B) Price variance and the standard variance C) Price variance and the quantity variance D) Quantity variance and the efficiency variance

A favorable direct materials price variance and an unfavorable direct materials quantity variance might indicate which of the following? A) Less expensive, inferior materials requiring less than the standard amount were used in production. B) Less expensive, inferior materials requiring more than the standard amount were used in production. C) More expensive, superior materials requiring more than the standard amount were used in production. D) More expensive, superior materials requiring less than the standard amount were used in production.

The ________ tells managers how much of the overall variance id due to paying a higher or lower price than expected for the quantity of materials it purchased. A) production volume variance B) overhead flexible budget variance C) price variance D) quantity variance

The ________ "tells managers how much of the total direct materials variance is due to using more or less materials than anticipated the by standards." A) production volume variance B) overhead flexible budget variance C) price variance D) quantity variance

The ________ "shows how well management has controlled overhead costs." A) overhead flexible budget variance B) production volume variance C) quantity variance D) price variance

Which variance is directly impacted if the employees who build the product go on strike and temporary workers who are slower and not as skilled are hired? A) Direct materials price variance B) Direct materials quantity variance C) Direct labor efficiency variance D) Direct labor rate variance

How is the direct labor rate variance calculated? A) The difference between the standard labor rate and the actual labor rate multiplied by the actual labor hours used B) The difference between the standard labor rate and the actual labor rate multiplied by the standard allowable hours C) The difference between the standard labor hours and the allowable labor hours D) The difference between the standard labor rate and the actual labor rate

How is the direct labor efficiency variance calculated? A) The difference between the standard labor hours allowed and the actual labor hours used multiplied by the actual labor rate B) The difference between the standard labor hours allowed and the actual labor hours used multiplied by the standard labor rate C) The difference between the standard labor hours and the actual labor hours used D) The difference between the standard labor rate and the actual labor rate

The direct labor variance can be divided into two variances A) rate variance and price variance. B) price variance and usage variance. C) rate variance and efficiency variance. D) price variance and efficiency variance.

A favorable direct labor efficiency variance might indicate that A) higher skilled workers were used that performed the task slower than expected. B) higher skilled workers were used that performed the task faster than expected. C) lower skilled workers were paid a higher wage than expected. D) lower skilled workers were paid a lower wage than expected

The unemployment rate is high in the city in which a company has a factory. The company finds that they are able to pay new employees a lower wage per hour than when the unemployment rate was lower a year ago. Which of the following variances may be directly impacted? A) Direct materials price variance B) Direct materials quantity variance C) Direct labor efficiency variance D) Direct labor rate variance

A company receives an unusually high number of orders in a month. To produce all of the orders within the scheduled dates of delivery, the company pays employees an extra $8 per hour for every hour of overtime the employees work. Which of the following variances may be directly impacted? A) Direct materials price variance B) Direct materials quantity variance C) Direct labor efficiency variance D) Direct labor rate variance

An unfavorable direct labor rate variance indicates which of the following? A) Both Actual Quantity (AQ) and actual cost of direct labor hours exceeded standard quantity and standard cost of hours for actual output. B) The Actual Quantity (AQ) of direct labor hours worked exceeded the standard quantity of hours for actual output. C) The actual direct labor cost per hour exceeded the standard direct labor cost per hour for Actual Quantity (AQ) of direct labor hours. D) The actual cost of direct labor per hour was less than the standard cost of direct labor per hour.

A favorable direct labor efficiency variance and an unfavorable direct labor rate variance might indicate which of the following? A) Unskilled workers using more actual hours than standard, paid at a higher rate per hour than the standard rate B) Unskilled workers using less actual hours than standard, paid a lesser rate per hour than the standard rate C) Skilled workers using less actual hours than standard, paid at a higher rate per hour than the standard rate D) Skilled workers using more actual hours than standard, paid at a higher rate per hour than the standard rate

The ________ variance "measures how well the business keeps prices of direct labor inputs within standards." A) direct labor production volume B) direct labor overhead flexible budget C) direct labor rate D) direct labor efficiency

The ________ variance "measures whether the quantity of direct labor used to make the actual number of outputs is within the standard allowed for that number of outputs." A) direct labor production volume B) direct labor overhead flexible budget C) direct labor rate D) direct labor efficiency

The Davidson Corporation produces clocks. According to company standards, it should take 2 hours of direct labor to produce a clock. Davidson's standard labor cost is $19 per hour. During June, Thomas produced 6,200 stopwatches and used 13,500 hours of direct labor at a total cost of $260,000. What is Thomas' direct labor rate variance for June? A) $1,607 favorable B) $1,607 unfavorable C) $3,500 favorable D) $3,500 unfavorable

All of the following are advantages of using standard costs and variances except A) standard costs have benchmarks managers use to judge actual costs. B) standard costs and benchmarks are useful tools that mangers use as a basis in the master budget. C) the timeliness that occurs when variances are computed once each month. D) standard costing systems simplify the bookkeeping process.

Disadvantages of using standard costs and variances include all of the following except A) the excessive cost to keep standards up-to-date. B) companies that pay employees a salary because direct labor is a fixed cost rather than a variable cost. C) those manufacturing costs that enter Work in Process Inventory are recorded at standard cost, rather than actual cost. D) traditional standards can promote unfavorable employee behavior.

A cost benchmark is valid only if the standards are A) based on historical costs. B) kept up to date. C) reviewed by salaried assembly-line workers. D) practical and attainable.

Standards should be reviewed and adjusted at least A) yearly. B) monthly. C) weekly. D) daily.

At lean companies, employees tend to be multi-skilled and cross-trained to perform a number of duties. These workers are held in high-esteem by management and are considered to be part of a team effort, rather than a labor force to be controlled. Consequently, this A) increases the importance of direct labor standards. B) decreases the importance of direct labor standards. C) Both of the above. D) None of the above.

When deciding whether or not to adopt standard costs and perform variance analysis, management should do which of the following? A) Examine the costs and benefits of a standard costing system B) Update inaccurate standard costs C) Adopt lean thinking D) Increase automation of assembly lines

How is the variable manufacturing overhead efficiency variance calculated? A) The difference between the actual overhead rate and the standard overhead rate multiplied by the standard overhead rate B) The difference between the standard hours allowed and the actual hours used multiplied by the standard overhead rate C) The difference between the standard hours allowed and the actual hours used D) The difference between the standard hours allowed and the actual hours used multiplied by the actual overhead rate

How is the variable overhead rate variance calculated? A) The difference between the actual overhead rate and the standard overhead rate multiplied by the actual hours B) The difference between the actual overhead rate and the standard overhead rate multiplied by the standard hours allowed C) The difference between the standard hours allowed and the actual hours used multiplied by the standard overhead rate D) The difference between the standard hours allowed and the actual hours used multiplied by the actual overhead rate

The variable overhead rate variance is also known as which of the following? A) Variable overhead efficiency variance B) Variable overhead usage variance C) Variable overhead spending variance D) Variable overhead price variance

The variable overhead rate variance may be caused by variances in the following production inputs except A) indirect materials. B) indirect labor. C) fixed manufacturing overhead. D) None of the above impacts the variable overhead rate variance.

What does the variable overhead efficiency variance tell management? A) How efficiently variable manufacturing overhead was used B) How efficiently fixed manufacturing overhead was used C) How efficiently employees applied manufacturing overhead to each unit D) How much of the total variable manufacturing overhead variance is due to machine hours used given the actual volume of output

The ________ is the difference between the actual machine hours run and the standard machine hours allowed for the actual production volume. A) production volume variance B) overhead flexible budget variance C) variable overhead efficiency variance D) both A and C

Which of the following statements may be true if actual units produced exceed the budgeted units to be produced? A) Production volume variance is expected to be unfavorable. B) Overhead flexible budget variance is expected to be favorable. C) Fixed overhead volume variance is expected to be favorable. D) Overhead flexible budget variance is expected to be unfavorable.

The two fixed overhead variances are the A) budget and volume variances. B) rate and efficiency variances. C) price and usage variances. D) rate and volume variances.

What type of variance results when the actual fixed overhead costs incurred are greater than the budgeted fixed overhead costs? A) Favorable fixed overhead budget variance B) Unfavorable fixed overhead budget variance C) Favorable fixed overhead volume variance D) Unfavorable fixed overhead volume variance

How is the fixed overhead budget variance calculated? A) The difference between the standard fixed overhead rate and the actual fixed overhead rate multiplied by the actual hours used B) The difference between the standard fixed overhead costs allocated and the budgeted fixed overhead costs C) The difference between the actual fixed overhead costs incurred and the budgeted fixed overhead costs D) The difference between the actual fixed overhead costs incurred and the standard fixed overhead costs allocated

How is the fixed overhead volume variance calculated? A) The difference between the standard fixed overhead rate and the actual fixed overhead rate multiplied by the actual hours used B) The difference between the standard fixed overhead costs allocated to production and the budgeted fixed overhead costs C) The difference between the actual fixed overhead costs incurred and the budgeted fixed overhead costs D) The difference between the actual fixed overhead costs incurred and the standard fixed overhead costs allocated

Which of the following examples may lead directly to a favorable fixed overhead volume variance? A) A decrease in county property taxes for the factory B) Producing more units than anticipated C) A decrease in wages paid to factory maintenance workers D) Receiving a volume discount on indirect materials purchased

What may cause a sales volume variance for fixed expenses? A) Insurance costs on the factory rise unexpectedly during the year due to a crisis in the insurance industry. B) The union calls for a strike of factory workers and temporary workers are hired to fill in for the striking employees. C) The lease on the manufacturing facility is renegotiated and the lease payments increase during the year. D) The number of units actually sold falls within a different relevant range than the static budget sales volume.

The entry to allocate manufacturing overhead costs to production involves which of the following? A) Debit to work in process inventory for the actual cost of overhead B) Credit to work in process inventory for the standard rate of overhead times the standard quantity of the allocation base allowed for actual output C) Credit to work in process inventory for the actual cost of overhead D) Debit to work in process inventory for the standard rate of overhead times the standard quantity of the allocation base allowed for actual output

Work in process inventory is debited for which of the following when recording the use of direct materials in the production process? A) Standard quantity of Direct Materials Used (AQU) for actual production output times actual cost per pound B) Standard quantity of Direct Materials Used (AQU) for actual production output times standard cost per pound C) Actual quantity (AQ) of Direct Materials Used (AQU) times standard cost per pound D) Actual quantity (AQ) of Direct Materials Used (AQU) times actual cost per pound

Raw materials inventory is credited for which of the following when recording the use of direct materials in the production process? A) Standard quantity of Direct Materials Used (AQU) for actual production multiplied by the actual cost per pound B) Standard quantity of Direct Materials Used (AQU) for actual production multiplied by the standard cost per pound C) Actual Quantity (AQ) of direct materials put into production multiplied by the actual cost per pound D) Actual Quantity (AQ) of direct materials put into production multiplied by the standard cost per pound

Which of the following shows the effect on work in process inventory when assigning direct labor costs to the production process? A) Debited for standard quantity of direct labor used for actual production multiplied by the standard cost per hour B) Debited for actual quantity (AQ) of direct labor multiplied by the standard cost per hour C) Credited for standard quantity of direct labor used for actual production multiplied by the standard cost per hour D) Credited for standard quantity usage of direct labor for actual production multiplied by the actual cost per hour

Cost of goods sold is shown at which of the following on a standard cost income statement? A) Standard cost B) Actual cost C) Neither A nor B D) Both A and B

Regarding a standard cost income statement, which of the following is true? A) Operating income is shown at standard cost. B) Variances are listed separately. C) Cost of goods sold is shown only at standard cost. D) Sales revenue is shown only at standard revenue.

The ________ department is most likely responsible to incur a "direct material price variance." A) production B) marketing C) personnel D) purchasing

The ________ department may be responsible to incur a "direct labor rate variance." A) finance B) marketing C) personnel D) purchasing

The ________ department may be responsible to incur a "direct labor efficiency variance." A) marketing B) production C) purchasing D) personnel

The ________ department may be responsible to incur a "sales volume variance." A) marketing B) production C) purchasing D) personnel

Which term below is best paired with "a summarized budget that can easily be computed for several volume levels"? A) Flexible budget B) Sales volume variance C) Benchmarking D) Overhead flexible budget variance

Which term below is best paired with "The difference between the actual overhead cost incurred and the flexible budget amount of overhead cost for actual number of output"? A) Sales volume variance B) Flexible budget C) Overhead flexible budget variance D) Benchmarking

A(n) ________ "arises because the number of units actually sold differs from the static budget units." A) flexible budget B) sales volume variance C) benchmarking D) overhead flexible budget variance

The following are all methods of analyzing capital investments except A) Payback Period. B) Regression Analysis. C) Net Present Value (NPV). D) Accounting Rate of Return (ARR).